In the business world, growth is often achieved by executing traditional tactics. Michael Golway, winner of the 2017 YPO Global Innovation Award, suggests another way: innovation.
“If you are not innovating, you will get left behind.”
So says YPO member Michael Golway, President and CEO of Advanced Solutions Inc., a privately held company he acquired in November 2004 and parent company to an aggregate of technology businesses he began building at age 31. He is the lead inventor for the integrated solution of TSIM® software and BioAssemblyBot®, a robotic 3D printing system for human tissue structures for which he received the 2017 YPO Global Innovation Award as part of YPO Innovation Week.
Golway shares his passion for innovation as a tool to create new market share.
How did you first recognize the advantages of expanding your footprint through innovation?
I am an engineer, so I am conditioned to solve problems. Early in my entrepreneurial career it became apparent that growing the business would require us to innovate in ways that solved problems differently. At first, the company was too small to have the resources to do complete paradigm-shift innovation, so we focused on continuous improvement — nothing radical, but we brought value to customers in ways that differentiated us from our competitors.
Today we are still doing continuous improvement (as most businesses do) but we have acquired the resources to focus on radical breakthroughs as well. This approach requires a high tolerance for risk, but I always say: Expect failure, but fail fast forward. In other words, the quicker you realize you are on a path that will not work, the quicker you can move on to one that may lead to greater success.
What is the relationship between innovating and acquiring existing companies?
They complement each other. Sometimes we make acquisitions for subject-matter expertise or technology that enhances something we are working on. Acquisitions can accelerate the pace of innovation and, if done correctly, make the final work product better.
In my career, acquisitions have served to increase customer base and bring new relationships on board. Innovation is slow by nature, although we work every day to get faster. Acquisitions — typically of a known entity with an established business and customer base — can provide a relatively quick source of cash to invest in innovation.
How about pitfalls?
You put capital at risk; you may invest in an innovation that does not work. We have gotten better at this, but it still is a consideration.
Reputational damage is also possible, but I do not worry about it much. We vet our acquisitions in such a way that we have a lot of confidence they will work out. Our innovations have gone through internal testing, so most of the failures have already happened. But, when you put something new into the hands of early adopter customers, anything could happen. I have found that if you set expectations with those customers and you are candid about the kinks still to be fixed, they are eager to play their role in helping you make the product a better solution to their problems.
How do you lead a staff that shares your innovation mindset?
A lot of my time is spent creating an environment in which the brilliant scientists and engineers in the company can do their best work. I also keep them informed about customer feedback on our products, which helps them make the products better.
Despite the benefits of innovation, are there still times to go head to head with competitors?
Competition makes us better. When we innovate, we have a short window during which perhaps no competitor has what we have. But then someone will create a slight derivative of our product and suddenly we are old news. Innovation is a constant cycle, but we embrace it.
What advice would you give other business leaders about using innovation to grow their companies?
Innovation is the key to longevity for a business. If you are not innovating, eventually competitors will take market share away from you. Develop a focused strategy around innovation, based on an understanding of the level of innovation you are undertaking: continuous improvement or breakthrough. If you are in continuous improvement mode, be sure you are improving a product that customers want; there may be someone out there who is solving their problem better, faster and more cost-effectively. Finally, talk to your customers. Understanding their problems is the only way you can solve them.